Description

Joint ventures can prove to be a useful and necessary way to enter new markets. In some markets that restrict inward investment, joint ventures may be the only way to achieve market access. Within joint ventures, clear equity positions are usually taken by the participants. Such holdings can vary in size significantly, although it is usually important to establish clear lines of management control over decisions
in order to achieve success. A lesser form of participation, which may or may not involve equity participation, is that of strategic alliances. Joint ventures do tend to have a relatively high failure rate. Nonetheless, they also enjoy a number of specific advantages.